Real Estate had been growing strongly for many years due to rapid economic growth, but the Government established new regulations last year aimed at slowing down the market. Since then demand and prices have both decreased in a large way. Here are a few of the most recent statistics to gauge the Chinese real estate market’s next move.

The total supply of land in China that is intended for real estate development has decreased by 15 percent in the first half of 2012. On the other hand, the average cost for residential plots increases by 1.8 percent annually, according the China’s Ministry of Land and Resources.

From January to June 2012, the ministry has released 597 million square meters of land for property development, which accounts for 22 percent of China’s total land supply. As for the pricing, land plots that are designated for residential homes are sold at about 4,522 yuan for each square meter. This amount was applied during the first six months of 2012.

Increase in Prices for Residential Plots

According to the National Bureau of Statistics, several cities in China undergo a monthly increase in residential home prices, as the cost has doubled in July 2012. The Bureau reported that the prices increased in 50 cities in the country although this excluded the affordable housing program subsidized by the government. In May, only 6 cities were affected by the price hike, yet this situation has become worse in July.

Zhang Hongwei, a real estate analyst at a Shanghai property research organization, reported an increase in sales of middle to high-end residential properties in China. The sales were higher in large cities beginning May 2012. However, more real estate developers have decided to trim or cancel discounts, which contributed to the high prices of these new homes.

Based on the data released by the China Index Academy, most new homes located in the 10 largest cities in China have an average cost of 15,470 yuan or US$2,436. In other cities such as Beijing, Guangzhou, and Shanghai, home purchase restrictions have been enforced. This has led to a price increase of about 0.3 percent since June 2012. However, new home prices in Shenzhen remained unchanged. As of this month, new homes with a total land area of 439,000 square meters were sold in Shanghai, which is lower by 16.8 percent from last month.

Mark Budden, an area leader at an asset consultancy in China, stated that it is too early to declare if this current situation in real estate prices will sustain its momentum. The restrictions imposed in purchasing homes, as well as the increase in property taxes, will possibly lead to a long-term growth in new home prices.

The current home market also presented similar gains. In fact, 38 cities in the country have a monthly price increase in July while attaining a maximum gain of about 2.2 percent. According to the bureau, the statistics were higher as compared to June, where only 31 cities had a maximum gain of 1.1 percent.

There is a continuing decrease in property sales between January and July 2012, and this is caused by the ongoing new home price increase in several cities in China. The country has tightened restrictions on the property sector, and this decision was aimed to bring residential home prices back to a much reasonable level. The government also implemented regulations in several cities that restrict home purchases while requiring expensive down payments to purchase these residential plots and houses.

Alike parlance, a market is a location where trading takes place. Whenever we consider markets, an image that blinks across our thoughts is of a place which is quite hectic, with purchasers and vendors, some sellers, shouting at the top of their voice, attempting to entice clients to get their items.

In the early stages of civilization, people were self-dependent. They grew everything they needed. Food was the primary commodity, which could be very quickly increased at the backyard, and for the non-vegetarians, jungles were open without limitations on hunting. However, with the development of civilization, the necessities of every being increased; they required clothes, items, instruments, tools and lots of various other points which could not be conveniently made or produced by one person or household. Hence, the requirement of an usual spot was really felt, where people which had a commodity to offer and the people who required that product, could gather satisfy their common demands.

With time, the fashion in which the marketplaces operated transformed and developed. Markets came to be an increasing number of sophisticated and concentrated on their purchase so about save time and space. Different sort of markets entered being which concentrated on a particular sort of commodity or transaction. In today’s world, there are markets which cater to the necessities of manufacturers, sellers, ultimate consumers, little ones, women, men, pupils and just what not. For the discussion of the topic available, the various type of markets that already existing in today day can be extensively categorized as products markets, solution markets and financial markets. The present post finds to provide an introduction of Financial Markets.

WHAT IS A FINANCIAL MARKET?

Financial Markets, as the name proposes, is a market where different financial tools are traded. The musical instruments that are sold these markets differ in attributes. They are in truth perfectly fitted to suit the demands of numerous people. At a macro level, individuals with excess money provide their money to the people who need it for investment in various type of tasks.

There is another gamer in the financial market aside from purchasers and vendors. The one which wishes to provide money and the one who intends to spend the cash may be located in various topographical locations, very much from each various other. A common location for this transaction will certainly need the meeting of these individuals personally to shut the transaction. This may once more lead to a bunch of hardship. It may also hold true that the rate at which the lender wishes to lend his money or the period for which he desires his money to incur passion, may not be acceptable to the borrower of the cash. This would cause a bunch of flaws and latches for closing the deal. To fix this trouble, we have a physical body called the Intermediaries, which run in the financial markets. Middlemans are the ones from whom the borrowers obtain the harbored cost savings of the lenders. Their main feature is to function as associated with mobilize the funds from the lender to the debtor.

Financial Markets are complex and unpredictable. The movements in financial markets of one country may be the result of cases happening in some foreign land. It might be challenging to comprehend the financial markets at a provided time and spot. Nonetheless, an intelligent gamer in financial markets consistently takes choices by very carefully examining the trends in the financial markets and closely complying with the cues in the residential and worldwide markets.

One also has to be clear about why one would like to go into the financial markets. If one intends to enter into as a capitalist, one must invest in safeties which have the potential of returning his investment with interest after the amount of time for which one intends to spend. In this situation one needs to generally buy protections which are protected and have a reputation of giving excellent returns. On the other hand, if one intends to trade in safeties, one should thoroughly learn the fads prevailing in the everyday markets and make an intelligent choice by basing one’s judgment on that ground. To lessen threats, one should have a diverse portfolio, to ensure that even if one or some of the financial investments endure, the others make good one’s loss.